In the last few years, the market for air-conditioners in metros and Tier I cities in India has reached saturation point. Our client, a global manufacturer of air-conditioners, thus wanted to penetrate the Tier II and III cities to grow their sales.

In order to do this, they wanted to understand the market dynamics, competition, products, customer landscape and purchasing behaviour in different cities and regions in India, based on which they would identify areas with high potential and formulate their strategy for penetrating these markets.

The client did not have an adequate understanding of Tier II and III cities. They wanted an independent perspective and actionable intelligence that would help them formulate their go-to-market strategy in the 24 potential cities.

ValueNotes leveraged its extensive pan-India network to reach out to over 350 respondents including manufacturers, retailers, supply chain partners and trade experts to understand the market in each of the 24 cities. Furthermore, to understand the customer landscape in five regions, we conducted telephonic and field interviews with over 500 customers who had purchased an air-conditioner in the previous 10 months.

Our respondent base covered all geographies in India, sales teams of key industry players, different formats of retail stores, distributors, and sales and service dealers. ValueNotes used qualitative probing techniques that gave deep and valuable insights about the market and competition in each city. Talking to multiple respondents in the supply chain enabled us to validate the intelligence that we gathered.

To arrive at reliable estimates of the market size (by type of end-users, type of air-conditioner, competition structure, segmentation by tonnage, and star ratings) and supply chain of key players in each of the city, we triangulated the estimates from the demand and supply sides, along with experts’ estimates.

ValueNotes research helped the client formulate their go-to-market strategy to tap the INR 2,200cr air-conditioner market in 24 Tier II and III cities in India. The study also enabled the client to understand their brand perception vis-à-vis their competitors. The research provided intelligence and recommendations on areas such as:

Market size, segmentation and competition structure of air-conditioners in each city

Different sales channels adopted and margins offered by peers, and what works best in each city